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Where do you start with a cloud accounting software comparison?

I've been tasked with developing compared options for our CFO and others to consider. I'm interested in some guidance on a considerations, best practices, tips or insights for narrowing this down and properly selecting, comparing and presenting options.

Answers

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

Anonymous, take a look at these free white papers from Proformative's library:

"Running your Business in the Cloud: A CFO’s/CIO’s Journey"

"Is It Time To Replace Your Old Accounting System? - Stepping Up To Cloud Computiing"

Enjoy!

Best... Sarah

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Don't laugh, but have you tried Google? Honestly, it's where I would start if I was asked to research something from my boss and had no ideas. Type in Cloud Accounting Software and check it out. Check this article out: http://www.entrepreneurshiplife.com/cloud-based-online-accounting-software/

Topic Expert
Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

@Christie...don't laugh, but I think this forum may be better, because people can interact with you like they are in this thread:).

That said, Google can help you later with software vendor information, but your first step is to define your requirements going forward.

For the thread originator, Anon, we can help you more if you can provide a little more context:
-type of business, size, locations, any foreign business?
-accounting system with integration to other packages, or ERP?
-if you think cloud is the answer, what is your/your CFO's question?

Regards
Len

Michael Rutkowski
Title: Controller
Company: N/A
(Controller, N/A) |

I'd start with defining your accounting and finance needs. Then, you can start to narrow down on companies that meet most of those needs.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

By no means technical guidance but I would start with the question "how do you make money" and identify the key requirements for tracking revenue and associated costs for your business.

Are you a professional services business, subscription based business, construction firm? Is each sale closed by a salesperson or do you sell a product that customers purchase on their own? Does your business invest heavily in capex or carry inventory?

What are the key metrics you will need to report to senior-management and will the systems you are evaluating streamline this for you?

I'd also review your existing systems and consider whether you would be replacing them or building around/integrating with them.

There are a few "must haves" that you will identify specific to your company and as a result you will end up with a list of requirements that are best met by a short list of the software system providers.

You will also have the opportunity to speak with existing customers about their experience as part of the eval process. Make sure you speak with someone with a business similar to yours, if available.

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

First develop your requirements, once you do that it will be a lot easier to decide which software to use. Here is a link to an site that provides some free RFP documents. http://www.infotivity.com/accounting-system-criteria-detail.html

Topic Expert
Nicole Lucarelli
Title: Director
Company: Financial Services
LinkedIn Profile
(Director, Financial Services) |

As you talk with providers, I would also be clear about how they can meet your requirements. To understand total cost of ownership, determine if they can meet your requirement "out of the box", with configuration (a built in option), or with customization (programming changes). Customization tends to be more expensive to go live and maintain.

Topic Expert
Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

Paul's suggestion to focus on the top issues your organization faces is very sound. Most companies have some requirements that are generally applicable to many companies (say for Accounts Payable), and some specific functional or financial requirements that are unique to your industry or your business model(s). Those unique areas are where you should focus your evaluation first - that is where any ERP solution will potentially add the most value.

ERP systems have thousands of features - and ERP providers all have their own perspective on the relative value of those features compared to the market as a whole. In the end your own top criteria should drive your decision - if you don't understand your own requirements the process will become confusing and complex.

Bob Scarborough
www.tensoft.com

Anonymous
(Agent, JKS Solutions, Inc.) |

Its hard to answer these broad questions. Are you seeking to evaluate cloud accounting software or are you considering a full cloud implementation.

Financing and security would be the first things to think about, then you want to identify the value adds for your business.

Determining which software apps to convert to is the same as evaluating any software application.

Some people simply want a cloud accounting environment, others want a desktop environment. Some companies try it out incrementally.

There are a lot of opinions.

One thing you might do to educate yourself about the overall value is to take a look at the videos on Intacct.com, you can sign up for a demo session with Bill.com.

If your company is interested in a certain cloud host, be sure that they are in compliance with all the software licenses that you run on, if not you will be in violation of software licenses.

If you are interested in certain saas software, just sign up for a demo to see if you want to put it on your list of options, and ask the teams you talk to about implementation and what the process is.

Shawn DeBoer
Title: Business Technology and Planning Directo..
Company: American Family Insurance
(Business Technology and Planning Director, American Family Insurance) |

Agree with others - certainly start by knowing the key drivers for your business and what's needed to measure the business effectively. Systems integrations and closing the books efficiently are more tactical concerns.

Generally speaking, I would say never overpay for a solution. Sounds obvious but what I mean is don't spend $1 million on big 3 ERP and end up utilizing 50% of the functionaltiy. Better to spend $100K and use 80-90% of the functionality. Finance/accounting is back office, not your core business. For small to mid-size businesses, cloud/SaaS is compelling..... maybe even Fortune 500 as well as the marketspace matures.

Trish Meyer
Title: VP of Finance
Company: GMI Holdings
(VP of Finance, GMI Holdings) |

I would first start with having a solid understanding of your internal requirements in regards to accounting, workflow and financial needs as well as any usability preferences. Once you have those down on paper, start contacting vendors and narrow down as you go along. Finally try to get some form of trial / test platform before you are fully on-board.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Interesting, no one mentioned obtaining executive team alignment and then agreeing on what the financial system needed to provide.

Each C-Level sphere will have some requirements, and some of everyones requirements will be on the basic requirement list, must need list and wish list.

But as a CFO to work in their own cloud (sorry had to use the pun) without team alignment is a guarantee of future headaches (and possibly failure).

Charles Chewning
Title: President
Company: The Accounting Software Library
(President, The Accounting Software Library) |

Since everyone agrees that a comprehensive requirements document is a must, I won't comment as I believe it as well. I would make several suggestions. Executive sponsorship is certainly required, but support by a critical mass of "users" is even more critical. People have to want a new system before they are going to want to use whatever system is selected.

While the creation of a requirements document is critical, duplicating what you are doing today accomplishes nothing. After the vast majority of people have bought into this project, you need to examine your organization, determine what improvements need to be made, make those improvements and only then create your requirements document.

I would spend some time educating yourself about today's accounting software and ERP software. Meet with vendors to discuss what they have to offer. Yes, they want to sell you, but your objective hear is learning more about functional possibilities of which you had no prior knowledge. You shouldn't define requirements simply because products offer that functionality, but you need to know what's possible.

Finally, I would spend time learning how manage the software selection process. Many failures are due simply to the fact that project managers did not know what they are doing and in many cases don't even recognize this weakness.

I have written a number of blogs about the software selection process (www.accountinglibrary.com) that you might find of interest. Actually they are not typical short documents but in depth articles.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Charles,

I agree, after Executive Team Alignment, End-User buy-in is the most crucial, since they will be using the system.

That being the case, I advise the implementation team have a cross section of end-users as part of the team for both "expert" advice from the trenches and buy-in participation from those same trenches.

Without buy in from top and bottom, you have a system no one wants, uses of adds value to the organization; in other words you have dollars flushed down the toilet.

Hans Cristieon
Title: Accountant
Company: One Accounting Software
(Accountant, One Accounting Software) |

Hi,

You get an honest cloud accounting software comparison only from an individual who has used more than one of these tools.

If you want to know about the features, then you better take help of internet. Read about the features and capabilities of these tools. Draw a list of most suitable for your purpose then email their customer support. Spell out your requirements as clearly as possible. Ask them if they will customize it for you.

It is important to know that the software tool that works well for a business may not do so for another one, because of the differences in their requirements. Acquire all the information before taking a decision.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Kundan,

While that is a price comparison, it truly isn't a full comparison one would really need to determine if system X is better than system Y for YOUR COMPANY.

Every company is different. While accounting may be similar (but not the same), processes, procedures, analysis, reporting can be quite different.

Note: I actually use some of those systems mentioned in your link, and I know most of the pro's and con's of each, and not every business could use these systems as offered, or find a 3rd party application that is both affordable and complete enough for their particular needs.

On the other hand, many cloud systems have API's that allow a best of breed collection of systems to be integrated, which may provide that magic system. One must be wary and in-tune with the development teams of each, since the API would possibly need to be re-written with iteration of the SaaS software. Then of course, a component application can go out of business.

Research, Question, Research some more and deal with organizations that have a track record. While not perfect, it can reduce risk.

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